Miami New-Condo Sales Revive As Biggest Markets Fall

The new-condo boom struck louder in Miami than it did in other markets and fell hardest there when the thunder stopped.

Now the area stands out again. Its new-condo market is coming back stronger in sales and pricing, though it's a fraction of its old self.

Thank all-cash buyers from Venezuela, Argentina, Brazil, Canada, Europe and other locales. They see Miami's luxury condos at discounted prices as safe havens for investment money.

Positive sales trends continue.

"These people are parking their cash," said Peter Zalewski, principal of real estate consultancy Condo Vultures. "In Venezuela, they're fearful they're going to lose it (under President Hugo Chavez's strong-arm rule). Canadians are saying their currency is on par with the U.S. dollar, so in their minds they are getting a 25% discount."

Of the top eight U.S. metro areas, Miami was the only one in 2010 to show volume gains in attached-home closings, mainly condos, according to data gathered by Hanley Wood Market Intelligence.

The other seven fell 5% to 37% as Miami rose 8%. New York dropped 13%, Los Angeles 20% and San Francisco 37%. Unit sales totaled 4,120 in Miami — above L.A.'s 3,935 — but that still pales vs. pre-crash years 2005-07, when 20,000 to 30,000 units sold each year.

The Miami metro figures cited by Hanley Wood include Miami-Dade, Broward and Palm Beach counties. Miami-Dade is almost 70% of the total, at 2,842 closings.

"Miami is a happening place; it's really become a dynamic marketplace," said Jay Massirman, managing director of Asentus Real Estate, a real estate investment and merchant banking firm in Miami Beach.

All About Inventory

L.A. and other spots that dropped off in new-condo sales hadn't seen as big a spike in construction as the Miami area. Some 85,000 new condo units were built in the area from 2003-10, with 49,000 in coastal areas east of I-95, says Condo Vultures. Greater downtown Miami accounted for 22,250 units.

Bulk sales have figured in Miami's condo recovery, as investors bet that South Florida's cachet will continue. Last year 3,700 units in downtown Miami sold, up 57% from 2,300 in 2009, says Condo Vultures. Some 1,600 units sold in 10 bulk deals, Zalewski says. The rest were to individual all-cash buyers, mostly from overseas.

New construction has virtually halted as the market works through new inventory from prior years that hasn't sold yet. As prices rise, the pace of bulk buying seems to be slowing, at least in the coastal and downtown urban cores, leaving those markets to all-cash individual buyers, local watchers say.

Meanwhile, in Miami-Dade County the median price of an attached home — a condo, for the most part — rose 11% to $288,614 last year, says Hanley Wood. The median price was higher than the peak year of 2006, when 17,400 closings were recorded. But many low-price condos have been converted to rentals, skewing inventory to luxury units.

"A lot of the inventory has been absorbed fairly rapidly and it is continuing to be absorbed," Massirman said. Where blocks of brand-new condo towers on Brickell Avenue near downtown stood dark, "lights are on, people are jogging on the street and dining in restaurants."

Buying In Landlord Land

Most new occupants are renters.

"The number of buyers we see who are end users is a very tiny minority," Zalewski said. "The family of four with a dog doesn't have a chance in this (new-construction) market because there's no financing. If you can find a lender, you have to put down 50%."

Even so, the sales rebound is welcome relief to condo associations that have struggled to keep up services at empty or half-empty buildings. At least new owners pay monthly association fees, as their tenants live the high life, enjoying amenities such as sleek kitchens and rooftop pools.

"A lot of these association issues are working themselves out," Massirman said.

Falling prices had a lot to do with the rebound. "In 2009, prices started to bottom," Massirman said, noting that new condos on Brickell fell to as low as $200 a square foot from $600 three years earlier. In late 2009, investors "started piling in."

Bulk buyers and other investors are starting to turn their sights to suburban neighborhoods away from the coast, where prices are still falling, observers say.

"East of I-95 is well past the bottom," Zalewski said. "West of I-95 is a market that doesn't have any kind of safety stop. The 10% local unemployment rate has a drastic effect on the suburban market."

The median price of an existing single-family home in the Miami metro area, which includes condos, fell 18.3% in January from a year ago, to $165,800, says the National Association of Realtors. As prices fell, sales rose 32.9%.

Investors scouting the western suburbs of Miami are looking to pick up multiple units in garden-style condo conversions for $25,000 to $50,000 each, Zalewski says.

"The new-condo market is starting to slow. The resale condo market is starting to heat up," he said.

New construction has virtually halted as the market works through new inventory from prior years that hasn't sold yet. As prices rise, the pace of bulk buying seems to be slowing, at least in the coastal and downtown urban cores, leaving those markets to all-cash individual buyers, local watchers say.

Meanwhile, in Miami-Dade County the median price of an attached home — a condo, for the most part — rose 11% to $288,614 last year from 2009, says Hanley Wood. Both years showed higher median prices than the peak year of 2006, when 17,400 closings were recorded.

"A lot of the inventory has been absorbed fairly rapidly and it is continuing to be absorbed," Massirman said. Where blocks of brand-new condo towers on Brickell Avenue near downtown stood dark, "lights are on, people are jogging on the street and dining in restaurants."

Buying In Landlord Land

Most new occupants are renters.

"The number of buyers we see who are end users is a very tiny minority," Zalewski said. "The family of four with a dog doesn't have a chance in this (new-construction) market because there's no financing. If you can find a lender, you have to put down 50%."

Even so, the sales rebound is welcome relief to condo associations that have struggled to keep up services at empty or half-empty buildings. At least new owners pay monthly association fees, as their tenants live the high life, enjoying amenities such as sleek kitchens and rooftop pools.

"A lot of these association issues are working themselves out," Massirman said.

Falling prices had a lot to do with the rebound. "In 2009, prices started to bottom," Massirman said, noting that new condos on Brickell fell to as low as $200 a square foot from $600 three years earlier. In late 2009, investors "started piling in."

Bulk buyers and other investors are starting to turn their sights to suburban neighborhoods away from the coast, where prices are still falling, observers say.

"East of I-95 is well past the bottom," Zalewski said. "West of I-95 is a market that doesn't have any kind of safety stop. The 10% local unemployment rate has a drastic effect on the suburban market."

The median price of an existing single-family home in the Miami metro area, which includes condos, fell 18.3% in January from a year ago, to $165,800, says the National Association of Realtors. As prices fell, sales rose 32.9%.

Investors scouting the western suburbs of Miami are looking to pick up multiple units in garden-style condo conversions for $25,000 to $50,000 each, Zalewski says.

"The new-condo market is starting to slow. The resale condo market is starting to heat up," he said.

Source: http://www.investors.com/NewsAndAnalysis/Article/564849/201103031443/Miami-New-Condo-Sales-Revive-As-Biggest-Markets-Fall.aspx

By MARILYN ALVA, INVESTOR'S BUSINESS DAILY

Pending home sales up in Miami-Dade, Broward

Pending home sales in Miami-Dade and Broward counties rose in February, according to the Miami Association of Realtors.

Miami-Dade saw the biggest boost, with total pending sales – including single-family homes and condominiums – rising 22 percent, year-over-year, in February – to 11,182 from 9,164.

An increase in pending sales is an indication of future market conditions. A sale is listed as pending when a contract is signed, but the transaction has not closed.

Pending condo deals in Miami-Dade County saw the biggest year-over-year gains in February, increasing 26.9 percent to 6,497 from 5,122.

Sales of single-family homes in Miami-Dade rose 16 percent, to 4,685 from 4,042.

In Broward County, total pending sales increased 7.7 percent in February, to 8,391 from 7,791 contracts signed.

The county’s pending condo sales outperformed single-family home selling, rising 12.3 percent, year-over-year, to 4,878 from 4,343 contracts.

Pending sales of single-family homes increased 2 percent, to 3,513 from 3,448.

“Current statistics for pending sales reflect the positive performance of the South Florida real estate market over the last few months,” said Jack H. Levine, chairman of the Miami Association of Realtors. “We have seen year-over-year increase for pending sales for nearly one year. Pending sales have also increased month-over-month 10 out of the last 13 months.”

Nationwide, pending home sales decreased in January for the second straight month, according to the National Association of Realtors. The Pending Home Sales Index, a national forward-looking indicator, declined 2.8 percent from December to January, and is down 1.5 percent from its January 2010 level.

Source: http://www.bizjournals.com/southflorida/news/2011/02/28/pending-home-sales-up-in-miami-dade.html